Q4FY26 will be the best ever for Hindustan Zinc, says CEO Arun Misra

Hindustan Zinc's CEO says record Q3 profit is structurally sustainable, driven by low costs and rising silver recoveries, while cash will fund growth, not dividends

Hindustan Zinc delivered its highest ever quarterly profit in the third quarter of 2025-26, supported by a strong jump in

revenues from silver operations and its lowest cost structure in five years. In an interview with Saket Kumar, Chief Executive Officer Arun Misra explains the sustainability of these gains, expansion plans in silver, the dividend outlook, and the company’s foray into critical minerals. Edited excerpts: 

Hindustan Zinc achieved its lowest cost of producing zinc in five years. Can this cost be sustained in the coming quarters? 

Yes, the reduction is structurally sustainable. A major driver is the lower cost of coal and power. We are able to digest a much larger quantity of domestic coal now, and working on our power plants to ensure that whenever more domestic coal becomes available, we can absorb it efficiently. 

The share of green power in our mix will also keep rising from the current level and could go up to 22-25 per cent over time, which will help bring down overall power costs. 

We have also commissioned a roaster mill, which improves our credits. And at the mines, we have been able to optimise development and improve recoveries at the mills. 

A cost range between $900 and $1,000 per tonne is achievable and sustainable. 

Silver sharply rallied in recent months and contributed to your profits. Do you expect the metal to continue contributing at this level? Are you planning to increase output? 

We will increase silver production if we can change the grade of ore, but the grade is fixed and becomes more difficult to manage as we go deeper. What we can do, and are actively doing, is maximising recoveries. We are working on multiple projects to improve silver recovery in the mills. Our Fumer plant contributed about 8 tonnes this year. In the next business plan cycle, it should give us 34-35 tonnes of additional silver. We are also undertaking a deep de-bottlenecking of a circuit, which will give us a lead-silver cake that can be further processed. That should be ready in April-May. On top of that, we have started a ~200 crore project to extract silver that remains trapped in the zinc concentrate. If it works as expected, it could become a replacement for the fumer route and add another 30-35 tonnes of silver over time. So even though ore grade cannot be altered, we are doing everything possible on the processing and recovery side to increase silver output. 

What is your outlook on silver prices? 

That is difficult to predict. In today’s environment, I do not want to take a risk by giving a price outlook. 

Your output of mined metals and refined metals hit record levels this quarter. With such momentum, will you upgrade your full-year production guidance? 

No, we are not revising our guidance. With only one quarter left, our focus is on meeting the existing guidance. That said, Q4 should be the best ever quarter in Hindustan Zinc’s history. 

You turned net cash positive again this quarter. Should shareholders expect a higher dividend payout this year? 

That is a board decision. Our focus right now is on growth. More and more of cash generation should go into projects such as our 250 kilo tonne smelting expansion, the 10 million tonne tailings reprocessing project, and other investments. 

You recently won a tungsten block in Andhra Pradesh. When will exploration and production under your critical minerals strategy begin? 

For the tungsten block, we have completed the agreement with the state government. Depending on site-related regulatory clearances, exploration should begin in the next couple of months.